Whether you’re a startup or an existing company launching a new venture, you have to find a way to make money. When thinking about your business model, you need to have both a ’tomorrow strategy’ and a ’North Star vision’ of where you want to end up.
The cashflow or the gold?
A couple of months ago I launched a new startup together with 3 friends called Speakersbase, which is a platform connecting speakers and event organisers. It’s a dual-sided market place needing traction from both parties to make it fly. There are many ways to monetize a market place, but it’s challenging to focus.
During one of our brainstorm meetings around the business model one of my partners, David Bintein, pointed out that we had to figure out how to combine the short term and long term vision to create and capture value. Meaning we had to think about ‘the cashflow’ and ‘the gold’: how are we going to make money today to fund what will make us successful tomorrow? It struck me because it’s a crucial metaphor as many companies are focusing either on one or the other: the cashflow or the gold.
The Gold
Many startups are golddiggers, they focus on the big long term value they hope to create in the future, when everything goes according to plan. While doing so they forget about how to actually run the business on the short term and how to generate the necessary resources to go forward. So they turn quickly to investors, giving away too much of their company early on.
The Cashflow
Corporates on the other hand are mostly focussed on the short term value, profits and cashflow. As a result, they forget to focus on the long term which is one of the reasons they are being disrupted by challengers in the market with new and bolder propositions. If an idea is not bringing in short term revenues, it’s not fitting their spreadsheet. They leave a lot of future value on the table as their eyes are only on the cashflow and not on the gold further down the road.
The magic is in the combination
Whether you’re a startup or an existing company, think about how to find the cashflow for today and where you will find the gold that will make you successful in the end. You need to generate the short term resources to build the long term future you believe in.
The Cashflow: what is the most easy to sell solution that you can offer which is fulfilling a concrete need for someone in the market? It doesn’t need to be unique, it needs to be useful.
The Gold: what is the unique value that will make your product or service incontournable and successful in the end? It needs to be a big ambition.
The magic is in the combination. You need to generate the short term resources to build the long term future you believe in.
For Speakersbase we have created dynamic event- and company pages that we can sell to organisations in the short term (The Cashflow), while we believe that the real gold is in mining and matching the data of the speakers and event organisers (The Gold).
Let me know what you think, follow me on Twitter via @dadovanpeteghem or reach out via dado.vanpeteghem@duvalunion.com.
Look at the picture below.
A simple lead pencil, an everyday tool. Yet no single person on Earth is able to make this pencil on his own. You’d need to cut trees, chop wood, mine graphite, extract rubber, mold copper, produce paint, find glue, …
Long story short, nobody can do all these types of craftsmanship themselves.
Can you imagine all the hours spent by all of the people, from different parts around the world, speaking different languages and each specialized in different things, to make something as common as a lead pencil? Can you imagine how big of team you need to produce the pencil that is laying on your desk right now?
Now think about what is happening at your organization…
We see “digital verticals” like online marketing, growth hacking, social media or digital transformation as one-(wo)man jobs. Something a ‘T-shaped’, generalist should be able to pull off.
In the best case a second “lucky person” is put into place (who of course has to combine his or her craft with at least 1 other role in the organization, ‘because let’s be real: digital!?’).
Online marketing, growth hacking, social media nor digital transformation are different than making a pencil.
Though both look simple things, it takes specific experience of different craftsmen to do it well.
The next time you expect from your “digital guy” or “digital gall” to chop, mine, melt, mold, paint and glue at the same time, look at your pencil.
And think: “How many people did it take to make this pencil?”